Denver Art Museum

Ninety-one percent of employees eligible for the employer contributions defer more than 8% of their compensation, and average participant balances have nearly tripled in the past four years, to $78,260.

Four years ago, Denver’s Denver Art Museum had a 403(b) plan that had been launched two decades earlier. Like many nonprofit plans begun during that time frame, it was structured not as a group plan, but as individual contracts between the provider and museum employees.

“It was a very antiquated model. The problem was, because it was set up as individual retirement accounts [IRAs], as opposed to a group plan, we had no control,” Deputy Director and Chief Financial Officer (CFO) Curtis Woitte says. That prevented the sponsor from incorporating best practices in areas such as plan design to help employees save enough for their retirement. “After a lot of conversation and thoughtfulness, we decided that plan wasn’t going to meet our retirement objectives, moving forward,” he says.

The museum relaunched its retirement benefit as a group 403(b) plan in 2016, incorporating automatic enrollment features and re-enrollment. The plan changed recordkeepers to OneAmerica, brought on plan adviser Work Plan Retire and enhanced its employee education. Participation in the plan has jumped 87.2% in the past four years, from 47% prior to the relaunch to 88% currently. The average deferral has soared 152.5% in that same time, from 2.4% to 6.06% currently.

“We’re delighted that this plan, and the communications surrounding it, has encouraged more staffers to participate and save for their future, although many make less than $40,000 annually,” Director of Human Resources (HR) Laura Pratt says. “And a large portion of our staff is part time, about 50%.” All part-timers are eligible to participate in the plan.

The revamped plan’s 2016 implementation came after four years of due-diligence work, Woitte says. The default deferral rate has been kept at 2% since then, partly to incentivize employees to maximize the 2% match and partly to make deferring affordable. The sponsor didn’t initially use automatic escalation, but it will take effect starting next year. “We wanted to give our staff time to get acclimated to the new plan and the players[—i.e., the recordkeeper and adviser],” Pratt explains.

The Denver Art Museum’s educational approach also has changed. Representatives from OneAmerica come on-site regularly for group meetings and have expanded the plan’s education to include elements such as meetings for Spanish-speaking employees. An adviser from Work Plan Retire comes on-site for two full days each quarter and has group and one-on-one conversations with employees. “Their approach is to talk about the why of saving for retirement,” Woitte says of the adviser. “And we’ve recently added financial planning to the topics they can cover.”

As the plan relaunched in 2016, employees already participating could choose to stay with the prior independent-account plan or migrate to the revamped plan. More than two-thirds of employees met with Work Plan Retire to help them decide. “When we built the communications program for the plan, I was adamant that every employee had the right to an in-person, one-on-one consultation with our adviser,” Woitte says. “Our adviser had more than 120 one-on-one conversations, and all but one employee migrated their money into the new program.”

The museum isn’t done evolving its plan: It introduced a program this year to help employees facing student debt. The museum offers a 2% nonelective contribution to the retirement plan for employees who make timely student loan repayments of at least 2% of their compensation, in lieu of the employer match. That lets them accumulate retirement savings as they pay off their student debt. “We understand that there are ‘kitchen table economics’ that drive employees’ choices,” Woitte says. “The question then becomes, which of these goes away when you need to make financial choices? Retirement is the first thing to go, because it is the longest away.”

—Judy Ward